F.T.C. Accuses Drug Middlemen of Inflating Insulin Prices

Health|F.T.C. Accuses Drug Middlemen of Inflating Insulin Prices

The Federal Trade Commission said on Friday that it had taken legal action against the three largest pharmacy benefit managers, accusing the drug middlemen of inflating insulin prices and steering patients toward higher-cost insulin products to increase their profits.

The legal action targets CVS Health’s Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx and subsidiaries they’ve created to handle drug negotiations, agency officials said. The three collectively control 80 percent of prescriptions in the United States. Hired by employers and government health insurance programs like Medicare, pharmacy benefit managers, or P.B.M.s, are responsible for negotiating prices with drug makers, paying pharmacies and helping decide which drugs are available and at what cost to patients.

Agency officials said they had filed an administrative complaint, which is not yet public, that accuses the P.B.M.s of distorting competition and harming consumers. The agency is seeking to prohibit the benefit managers from favoring medicines because those drugs make them more money.

The agency’s five commissioners voted on the action, with the three Democratic appointees favoring it and the two Republicans recusing themselves.

Rahul Rao, an F.T.C. official, said in a news release on Friday that the largest P.B.M.s “have extracted millions of dollars off the backs of patients who need lifesaving medications.”

He said the agency’s legal action “seeks to put an end to the big three P.B.M.s’ exploitative conduct and marks an important step in fixing a broken system — a fix that could ripple beyond the insulin market and restore healthy competition to drive down drug prices for consumers.”